Health & Welfare | Daily Report

Photo by Jade Gordon

The evidence was there. UCLA researchers interviewed 47,000 California adults and children and concluded that those who drink one soda per day are 27 percent more likely to be overweight compared to those who pass on pop.

It didn’t matter in a state Senate committee yesterday, though. A bill that would have tacked a penny tax on each teaspoon of sugar in soda was tabled indefinitely, the Los Angeles Times reported.

The bill by Dean Florez, D-Shafter, might have brought an additional $1.4 billion into state coffers, a legislative analysis shows. The money was meant to go toward community programs to promote activity and cut down on obesity.

Under the heading "I’d like to buy the world a bottle of water?" the legislative analyst quoted Adam Smith in explaining the intent of the law:

 The famous economist Adam Smith wrote in the Wealth of Nations (1776): "It has for some time past been the policy of Great Britain to discourage the consumption of spirituous liquors, on account of their supposed tendency to ruin the health and to corrupt the morals of the common people."

While few would equate sugary srinks with the moral decay of American society ... A Health Policy Research Brief from the UCLA Center for Public Health Research shows startling increases in the number of adults and children who are obese or overweight in the last thirty years, and references studies that show that links greater consumption of sweetened beverages with adult and child obesity and overweight, and demonstrates that reducing intake of these beverages results in reductions of obesity and overweight.  

Epidemiological research shows the classic case for assessing an excise tax: the societal costs including lost productivity and health care costs of obesity and overweight are clearly linked with sweetened beverages but not paid for by the beverage drinker, representing an externality that is not accounted for in the price system.

The analysis also notes that an added tax would likely drive down consumption of sugary soda, which could lead to job loss in the soda industry.

That argument held some sway with lawmakers who left the bill in limbo, the Times reports.

...The measure is opposed by groups including the Howard Jarvis Taxpayers Assn., California Chamber of Commerce and the California Retailers Assn. Opponents said the tax could raise the price of a bottle of soda by 30% or more.

“Not only will higher taxes fail to make people healthier, they will jeopardize good-paying jobs and put further pressure on our struggling retailers,” said Bill Dombrowski, president of the retailers group. “We simply can’t tax our way to healthier lifestyles."